The Counselor of Embassy in China ( Smyth ) to the Secretary of State

590. During conversation with Dr. Wang Shih-chieh, Foreign Minister, March 26 (confidential), I took up question of Settlements and Diplomatic Quarter along lines directed in Dept’s 494, March 20 (repeated to Shanghai). I emphasized desirability of reaching early settlement, and said I felt consultation or discussion by Chinese Govt with other Govts concerned would expedite reaching of mutually satisfactory and just settlement of official obligations and liabilities of Diplomatic Quarter and Settlements at Shanghai and Amoy. Dr. Wang was quite receptive and said he would instruct Vice Minister Liu Chieh and Director Treaty Dept Wang Hua-cheng to look into matter and then discuss it with me. FonMin expressed opinion that consultation or discussion with all Govts concerned might be cumbersome and unnecessary, in view of minor interests of some Govts. British Embassy informed of action taken. (Sent Dept 590; repeated Shanghai 226, March 29, 11 a.m.)

British Ambassador22 called on FonMin few days ago and received impression FonMin somewhat more receptive on question of assets and liabilities. British Embassy on its part seems much less inclined to insist on question of transfer of control, and to be chiefly interested now in a satisfactory settlement of assets and liabilities.

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Consul General Shanghai is requested, in accordance with last paragraph Dept’s 494, March 20, to obtain and forward statements re American claims against Shanghai Municipal Council.

Dept will be informed of further developments.

  1. Sir Horace James Seymour.